New Mexico 2nd Judicial District Judge Valerie Huling said Dec. 27 in an opinion in Griego et al. v. New Mexico Workers' Compensation Administration that agriculture is the only industry allowed to shift the burden of injured workers onto taxpayers by not providing workers' compensation coverage.

The distinction used to define who is exempt and who is not exempt comes down to whether the worker is directly involved in harvesting crops or working with animals. For example, a worker picking onions on a farm would be excluded from coverage, but a person who is packing those same onions inside a building on the same farm would be covered by the Act.

The court found this distinction arbitrary and thus unconstitutional.

Many thanks to WorkCompCentral and its CEO David DePaolo for permission to run the complete story on his web-based service.

The article in full:

NM Case Makes Clear Work Comp Can't Discriminate Arbitrarily

Workers' compensation is a creature of statute. We're constantly reminded of that. But even though statutorily created, rules of fair play and application still apply - in other words the laws of any particular state must still meet constitutional standards.

In New Mexico a court ruled that a statute enacted in 1917 that excludes farm and agricultural workers from the New Mexico Workers' Compensation Act is unconstitutional.

The distinction used to define who is exempt and who is not exempt comes down to whether the worker is directly involved in harvesting crops or working with animals. For example, a worker picking onions on a farm would be excluded from coverage, but a person who is packing those same onions inside a building on the same farm would be covered by the Act.

The court found this distinction arbitrary and thus unconstitutional.

"Although the legislative intent of the farm and ranch exclusion, protection of the agricultural industry, is a legitimate goal, the exclusion is an arbitrary classification plainly at odds with the articulated purposes of the Act," Huling wrote.

This all came about when three dairy workers filed the lawsuit in 2009, after legislation failed that would have eliminated the farm and ranch workers' exemption from the Workers' Compensation Act. Similar legislation failed in 2007.

The three had worked as farm and ranch laborers for dairies and had received injuries in the course and scope of their employments. They sought workers' compensation benefits but the cases were dismissed under the 1917 law.

Judge Huling, finding the distinction between farm workers and dairy workers capricious and arbitrary, took on big ag business in the state noting in her opinion that the agricultural industry has reported average profits of $667 million over the past eight years, yet eliminating the exclusion would require coverage for about 10,000 workers, and the cost of providing workers' compensation insurance to the additional employees would be between $5 million and $7 million, less than 1% of annual profits.

Gail Evans, legal director for the New Mexico Center on Law and Poverty, filed the lawsuit on behalf of the workers and told WorkCompCentral that this conclusion was important because it stands in sharp contrast to what lobbyists for the agricultural industry told lawmakers in 2009.

"The fact that this will cost less than 1% of profits, that fact was not presented to the Legislature," she said. "The agricultural lobby presented incorrect information at the Legislature that it would cost $90 million."

The Workers' Compensation Administration argued what I consider to be an irrational point, and one that is largely moot after 100 years: that many agricultural workers are seasonal and earn varying wages working for multiple employers. The administration said it would be difficult to trace an injury to work performed for a specific employer, demonstrating that agricultural workers present challenges to the efficient administration of the system.

Lots of other states have been dealing with this issue, as I said, for nearly 100 years. New Mexico certainly has many models to choose from to comply with the court's ruling. The administration's argument lacks substance.

She cites two organizations as resource for more information about the laws in particular states. Farmworker Justice is working with other groups to improve workers' access to workers’ compensation benefits. It is working with the Migrant Clinicians Network to educate clinicians about the workers’ compensation system so that more clinics are able to handle such cases.

Fairchild reports:

Specifically, only 13 states, the District of Columbia, Puerto Rico and the Virgin Islands require employers to cover seasonal agricultural workers to the same extent as all other workers. These jurisdictions are: Arizona, California, Colorado, Connecticut, the District of Columbia, Hawaii, Idaho, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, Ohio, Oregon, Puerto Rico and the Virgin Islands. In an additional 13 states (including Florida and New York), only small farmers are exempt from providing coverage to their migrant and seasonal farmworkers. Moreover, employers who hire legal temporary foreign workers under the H-2A visa program are required to provide workers’ compensation insurance or equivalent benefits to their employees.

By contrast, 16 states do not require employers to provide any workers’ compensation insurance for migrant or seasonal farmworkers. These states are: Alabama, Arkansas, Delaware, Georgia, Indiana, Kansas, Kentucky, Mississippi, Missouri, Nebraska, Nevada, New Mexico, North Dakota, South Carolina, Tennessee and Texas. In an additional eight states, coverage is limited to full-time workers (e.g., Maine), workers in specialty jobs (e.g., South Dakota), or those employed on large farms (e.g., Rhode Island).

The chickens are coming home roost in Alabama. Two legally working foreign workers in auto plants have been arrested.

According to Fox News, “Before the auto workers' problems, in early November, [Alabama Governor Robert] Bentley told a Birmingham business audience that the law had not hurt Alabama's image with industrial prospects. But Bentley now says the two arrests involving foreign auto workers "theoretically" could hurt Alabama's ability to recruit foreign industries.”

The article in full:

Alabama Governor to Foreign Biz: Don't Worry About Immigration Law

After local police recently detained employees of Mercedes-Benz and Honda under the state's immigration law, Alabama's governor is reaching out to foreign executives to let them know that the state welcomes them.

"We are not anti-foreign companies. We are very pro-foreign companies," Bentley told reporters at the Capitol.

The Republican governor and other supporters of Alabama's new immigration law -- aimed at driving undocumented immigrants out of the state -- have described it as the nation's toughest. Some parts of it were put on hold by the federal courts, but major provisions took effect in late September, including allowing police to detain motorists who can't produce a valid driver's license.

Before the auto workers' problems, in early November, Bentley told a Birmingham business audience that the law had not hurt Alabama's image with industrial prospects. But Bentley now says the two arrests involving foreign auto workers "theoretically" could hurt Alabama's ability to recruit foreign industries.

Since then, two foreign workers with the Mercedes-Benz and Honda auto assembly plants in Alabama have run into problems.

Last week, a Honda employee from Japan was detained under the law in Leeds. Police at a roadblock found him carrying an international driver's license and passport, but not an Alabama license or Japanese license as required by the law. Leeds police said they released the man under the immigration law at a magistrate's recommendation, and a city judge dismissed a charge of driving without a license.

Before the auto workers' problems, in early November, Bentley told a Birmingham business audience that the law had not hurt Alabama's image with industrial prospects. But Bentley now says the two arrests involving foreign auto workers "theoretically" could hurt Alabama's ability to recruit foreign industries.

"Obviously people worry about that. I worry about that. I want our image to be very positive because we are open for business in Alabama," he said.

Bentley's job as governor includes leading industrial recruitment efforts, and he said he is calling foreign executives as reassurance about the law.

Bentley said he has talked with officials at companies including Mercedes and Golden Dragon, a Chinese company that has announced -- but not yet built -- a copper tubing plant in Thomasville. The governor said he's assured them that Alabama will work through any problems with the immigration law.

"People need to just calm down. Everything is going to be OK," he said.

An opponent of the law, Democratic state Sen. Hank Sanders of Selma, sent the governor a letter Monday urging him to support a repeal of the law when the next legislative session starts Feb. 7.

Sanders said the law has resurrected ugly images from the civil rights era 50 years ago and "has become a worldwide symbol of what's wrong with Alabama."

Bentley said Monday he will work with the Legislature to make the law simpler and easier to understand.

But he said, "It will not be repealed. If you live and work in this state, you must be legal."

Two Republican legislative leaders, Senate President Pro Tem Del Marsh of Anniston and House Speaker Mike Hubbard of Auburn, issued a joint statement saying the Legislature will consider minor changes. But they said, "We will not repeal or weaken the law, acquiescing to liberal elites' and news media's efforts to intimidate and shame Alabama."

Bentley, who served in the Legislature for eight years, said any complex law passed by the Legislature usually requires some modification and clarification once officials start implementing it, and the immigration law is no exception. He said he is working with the Legislature and the attorney general on that, as well as looking for administrative solutions.

He cited a new state computer program that allows county tag officials to verify the authenticity of a driver's license when a motorist seeks to renew it. There's also a new online program that lets people sign up to apply for farm jobs that were abandoned by foreign workers once the law took effect.

Bentley said he's also working on getting other countries to agree to a reciprocal agreement such as the one Germany and Alabama have. A German worker with a valid driver's license from that country can get an Alabama license and vice versa.

This is based on a story by The Associated Press.

Read more: http://latino.foxnews.com/latino/politics/2011/12/06/alabama-governor-says-worries-that-immigration-law-will-drive-away-foreign/#ixzz1fyovrwz6

The article in full:

By Kirk Johnson
Published: October 5, 2011

OLATHE, Colo. — How can there be a labor shortage when nearly one out of every 11 people in the nation are unemployed?

That’s the question John Harold asked himself last winter when he was trying to figure out how much help he would need to harvest the corn and onions on his 1,000-acre farm here in western Colorado.

The simple-sounding plan that resulted — hire more local people and fewer foreign workers — left Mr. Harold and others who took a similar path adrift in a predicament worthy of Kafka.

The more they tried to do something concrete to address immigration and joblessness, the worse off they found themselves.

“It’s absolutely true that people who have played by the rules are having the toughest time of all,” said Senator Michael Bennet, a Democrat from Colorado.

Mr. Harold, a 71-year-old Vietnam War veteran who drifted here in the late ’60s, has participated for about a decade in a federal program called H-2A that allows seasonal foreign workers into the country to make up the gap where willing and able American workers are few in number. He typically has brought in about 90 people from Mexico each year from July through October.

This year, though, with tough times lingering and a big jump in the minimum wage under the program, to nearly $10.50 an hour, Mr. Harold brought in only two-thirds of his usual contingent. The other positions, he figured, would be snapped up by jobless local residents wanting some extra summer cash.

“It didn’t take me six hours to realize I’d made a heck of a mistake,” Mr. Harold said, standing in his onion field on a recent afternoon as a crew of workers from Mexico cut the tops off yellow onions and bagged them.

“It is not an easy job,” said Kerry Mattics, 49, another H-2A farmer here in Olathe, who brought in only a third of his usual Mexican crew of 12 workers for his 50-acre fruit and vegetable farm, then struggled to make it through the season. “It’s outside, so if it’s wet, you’re wet, and if it’s hot you’re hot,” he said.

Still, Mr. Mattics said, he can’t help feeling that people have gotten soft.

“They wanted that $10.50 an hour without doing very much,” he said. “I know people with college degrees, working for the school system and only making 11 bucks.”

A mismatch between employers’ requirements and the skills and needs of the jobless — repeated across industries — has been a constant theme of this recessionary era. But here on the farm, mismatch can mean high anxiety.

The H-2A program, in particular, in trying to avoid displacing American citizens from jobs, strongly encourages farmers to hire locally if they can, with a requirement that they advertise in at least three states. That forces participants to take huge risks in guessing where a moving target might land — how many locals, how many foreigners — often with an entire season’s revenue at stake. Survival, not civic virtue, drives the equation, they say.

“Farmers have to bear almost all the labor market risk because they must prove no one really was available, qualified or willing to work,” said Dawn D. Thilmany, a professor of agricultural economics at Colorado State University. “But the only way to offer proof is to literally have a field left unharvested.”

Mr. Harold’s experience is a repeated refrain where farm labor is seasonal and population sparse. And even many immigration hard-liners have come to agree that the dearth of Americans willing to work the fields requires some sort of rethinking, at least, of the H-2A program. Indeed, Representative Lamar Smith of Texas, a conservative Republican, is pushing a bill that would greatly expand the number of foreign guest workers admitted to the country each year.

In Colorado, the unemployment rate in many rural counties is also significantly lower than in the cities — two neighboring counties here, for example, had 5.5 percent and 6 percent unemployment rates in August, according to state figures, compared with 9.1 percent for the nation as a whole. The big increase in the wage rate for H-2A workers, meanwhile, up nearly $2.50 an hour — calculated by averaging what farmers had to pay last year — also suggests that labor demand was already rising.

Mr. Harold usually hires about 50 local workers for the season — regulars who have worked summers for years — and most returned this year, he said. Finding new employees was where he ran into trouble. He was able to recover after the season started, he said, by rushing in another group of H-2A workers from Mexico.

But the broader story of labor in agriculture, economists and historians said, is that through good times and bad and across socioeconomic lines, people who find better lives off the farm rarely return. Mr. Harold and other H-2A farmers said that most of the local residents who tried field work this summer, for example, were Hispanic, many of whom, they said, had probably immigrated in years past for agricultural work before taking better-paid jobs in construction or landscaping.

Other farmers left in the lurch by local workers conceded that what they had to offer was a tough sell — full-time but temporary work. About 56,000 foreign workers came into the country with H-2A visas last year, according to the most recent federal figures, down from 60,000 in 2009.

Heath Terrell is one of the few new local residents who stuck it out. Mr. Terrell, a former hay hauler, was hired to drive a corn truck. That job kept him out of the fields, and out of the sun. Now, as the season has shifted from corn to onions, Mr. Terrell, 42, said he might just stay on with Mr. Harold through the winter, or at least onion season.

The Alabama Legislature opened its session on March 1 on a note of humility and compassion. In the Senate, a Christian pastor asked God to grant members “wisdom and discernment” to do what is right. “Not what’s right in their own eyes,” he said, “but what’s right according to your word.” Soon after, both houses passed, and the governor signed, the country’s cruelest, most unforgiving immigration law.

The law, which takes effect Sept. 1, is so inhumane that four Alabama church leaders — an Episcopal bishop, a Methodist bishop and a Roman Catholic archbishop and bishop — have sued to block it, saying it criminalizes acts of Christian compassion. It is a sweeping attempt to terrorize undocumented immigrants in every aspect of their lives, and to make potential criminals of anyone who may work or live with them or show them kindness.

It effectively makes it a crime to be an undocumented immigrant in Alabama, by criminalizing working, renting a home and failing to comply with federal registration laws that are largely obsolete. It nullifies any contracts when one party is an undocumented immigrant. It requires the police to check the papers of people they suspect to be here illegally.

The new regime does not spare American citizens. Businesses that knowingly employ illegal immigrants will lose their licenses. Public school officials will be required to determine students’ immigration status and report back to the state. Anyone knowingly “concealing, harboring or shielding” an illegal immigrant could be charged with a crime, say for renting someone an apartment or driving her to church or the doctor.

The American Civil Liberties Union and the Justice Department have also sued, calling the law an unconstitutional intrusion on the federal government’s authority to write and enforce immigration laws. The A.C.L.U. warns that the law would trample people’s fundamental rights to speak and travel freely, effectively deny children the chance to go to school and expose people to harassment and racial profiling.

These arguments have been made before, in opposition to similar, if less sweeping, laws passed in Arizona, Utah, Indiana and Georgia. What is remarkable in Alabama is the separate lawsuit by the four church leaders, who say the law violates their religious freedoms to perform acts of charity without regard to the immigration status of those they minister to or help.

“The law,” Archbishop Thomas Rodi of Mobile said in The Times, “attacks our core understanding of what it means to be a church.”

You’d think that any state would think twice before embracing a law that so vividly brings to mind the Fugitive Slave Act, the brutal legal and law-enforcement apparatus of the Jim Crow era, and the civil-rights struggle led by the Rev. Dr. Martin Luther King Jr. But waves of anti-immigrant hostility have made many in this country forget who and what we are.

Congress was once on the brink of an ambitious bipartisan reform that would have enabled millions of immigrants stranded by the failed immigration system to get right with the law. This sensible policy has been abandoned. We hope the church leaders can waken their fellow Alabamans to the moral damage done when forgiveness and justice are so ruthlessly denied. We hope Washington and the rest of the country will also listen.

Section 9 - Government contractors prohibited from hiring unlawful aliens

Section 11 - curb-side hiring prohibited

Section 13 – Harboring an unlawful alien

Section 15 prohibiting private sector hiring of unlawful aliens, at penalty of permanent revocation of licenses and permits

And

Section 26 - State of Alabama to provide E-Verify service to small employers

I have included below key passages in each of these sections.

“….the court shall direct the applicable governing bodies to forever suspend the business licenses and permits, if such exist, of the business entity or employer throughout the state….” (Section 15 (f)

Section 9 - Government contractors prohibited from hiring unlawful aliens

(a) As a condition for the award of any contract, grant, or incentive by the state, any political subdivision thereof, or any state-funded entity to a business entity or employer that employs one or more employees, the business entity or employer shall not knowingly employ, hire for employment, or continue to employ an unauthorized alien and shall attest to such, by sworn affidavit signed before a notary.

……Violations of Section 9 (a)

(2) Upon a second or subsequent violation of subsection (a) by any business entity or employer awarded a contract by the state, any political subdivision thereof, or any state-funded entity the business entity or employer shall be deemed in breach of contract and the state, any political subdivision thereof, or any state-funded entity shall terminate the contract after providing notice and an opportunity to be heard. Upon application by the state entity, political subdivision thereof, or state-funded entity, the Attorney General may bring an action to permanently revoke the business licenses and permits of the business entity or employer according to the procedures described in Section 15.

Section ii (a) prohibits unlawful aliens from applying for work

Section 11. (a) It is unlawful for a person who is an unauthorized alien to knowingly apply for work, solicit work in a public or private place, or perform work as an employee or independent contractor in this state.

Section 11 - curb-side hiring prohibited

(f) It is unlawful for an occupant of a motor vehicle that is stopped on a street, roadway, or highway to attempt to hire or hire and pick up passengers for work at a different location if the motor vehicle blocks or impedes the normal movement of traffic.

(g) It is unlawful for a person to enter a motor vehicle that is stopped on a street, roadway or highway in order to be hired by an occupant of the motor vehicle and to be transported to work at a different location if the motor vehicle blocks or impedes the normal movement of traffic.

(h) A person who is in violation of this section shall be guilty of a Class C misdemeanor and subject to a fine of not more than five hundred dollars ($500).

Section 13 – Harboring an unlawful alien

(a) It shall be unlawful for a person to do any of the following:

(1) Conceal, harbor, or shield or attempt to conceal, harbor, or shield or conspire to conceal, harbor, or shield an alien from detection in any place in this state, including any building or any means of transportation, if the person knows or recklessly disregards the fact that the alien has come to, has entered, or remains in the United States in violation of federal law.

Section 15 prohibiting private sector hiring of unlawful aliens, at penalty of permanent revocation of licenses and permits

(a) No business entity, employer, or public employer shall knowingly employ, hire for employment, or continue to employ an unauthorized alien to perform work within the State of Alabama. Knowingly employ, hire for employment, or continue to employ an unauthorized alien means the actions described in 8 U.S.C. § 1324a.

(b) Effective April 1, 2012, every business entity or employer in this state shall enroll in E-Verify and thereafter, according to the federal statutes and regulations governing E-Verify, shall verify the employment eligibility of the employee through E-Verify. A business entity or employer that uses E-Verify to verify the work authorization of an employee shall not be deemed to have violated this section with respect to the employment of that employee.

(c) On a finding of a first violation by a court of competent jurisdiction that a business entity or employer knowingly violated subsection (a), the court shall do all of the following:

(1) Order the business entity or employer to terminate the employment of every unauthorized alien.

(2) Subject the business entity or employer to a three-year probationary period throughout the state. During the probationary period, the business entity or employer shall file quarterly reports with the local district attorney of each new employee who is hired by the business entity or employer in the state.

(3) Order the business entity or employer to file a signed, sworn affidavit with the local district attorney within three days after the order is issued by the court stating that the business entity or employer has terminated the employment of every unauthorized alien and the business entity or employer will not knowingly or intentionally employ an unauthorized alien in this state.

(4) Direct the applicable state, county, or municipal governing bodies to suspend the business licenses and permits, if such exist, of the business entity or employer for a period not to exceed 10 business days specific to the business location where the unauthorized alien performed work.

(d)(1) Before a business license or permit that has been suspended under subsection (c) is reinstated, a legal representative of the business entity or employer shall submit to the court a signed, sworn affidavit stating that the business entity or employer is in compliance with the provisions of this act and a copy of the Memorandum of Understanding issued to the business entity or employer at the time of enrollment in E-Verify.

(2) The suspension of a business license or permit under subsection (c) shall terminate one business day after a legal representative of the business entity or employer submits a signed, sworn affidavit stating that the business entity or employer is in compliance with the provisions of this act to the court.

(e) For a second violation of subsection (a) by a business entity or employer, the court shall direct the applicable state, county, or municipal governing body to permanently revoke all business licenses and permits, if such exist, held by the business entity or employer specific to the business location where the unauthorized alien performed work. On receipt of the order, and notwithstanding any other law, the appropriate agencies shall immediately revoke the licenses and permits held by the business entity or employer.

(f) For a subsequent violation of subsection (a), the court shall direct the applicable governing bodies to forever suspend the business licenses and permits, if such exist, of the business entity or employer throughout the state.

…provisions of Section 15 must be enforced by public agencies:

(j) If any agency of the state or any political subdivision thereof fails to suspend the business licenses or permits, if such exist, as a result of a violation of this section, the agency shall be deemed to have violated subsection (a) of Section 5 and shall be subject to the penalties thereunder.

(k) In addition to the district attorneys of this state, the Attorney General shall also have authority to bring a civil complaint in any court of competent jurisdiction to enforce the requirements of this section.

(1) Any resident of this state may petition the Attorney General to bring an enforcement action against a specific business entity or employer by means of a written, signed petition. A valid petition shall include an allegation that describes the alleged violator or violators, as well as the action constituting the violation, and the date and location where the action occurred.

Section 17 – discriminatory to refuse to hire a lawful worker when the employer is employing an unlawful worker

(a) It shall be a discriminatory practice for a business entity or employer to fail to hire a job applicant who is a United States citizen or an alien who is authorized to work in the United States as defined in 8 U.S.C. § 1324a(h)(3) or discharge an employee working in Alabama who is a United States citizen or an alien who is authorized to work in the United States as defined in 8 U.S.C. § 1324a(h)(3) while retaining or hiring an employee who the business entity or employer knows, or reasonably should have known, is an unauthorized alien.

Section 26 - State of Alabama to provide E-Verify service to small employers

(a)(1) The Alabama Department of Homeland Security shall establish and maintain an E-Verify employer agent service for any business entity or employer in this state with 25 or fewer employees to use the E-Verify program to verify an employee’s employment eligibility on behalf of the business entity or employer. The Alabama Department of Homeland Security shall establish an E-Verify employer agent account with the United States Department of Homeland Security, shall enroll a participating business entity or employer in the E-Verify program on its behalf, and shall conform to all federal statutes and regulations governing E-Verify employer agents. The Alabama Department of Homeland Security shall not charge a fee to a participating business entity or employer for this service.

"Nearly two-thirds of Hispanics’ median net worth in 2005 came from home equity, according to the report, and when the housing market collapsed, so did their wealth. Median home equity for Hispanics fell by 51 percent in the period of the survey. The drop was compounded by the fact that Hispanics tended to live in the places that were hit hardest in the recession, like Florida and California, the report said."

The article:

WOODBRIDGE, Va. — Hispanic families accounted for the largest single decline in wealth of any ethnic and racial group in the country during the recession, according to a study published Tuesday by the Pew Research Center.

The study, which used data collected by the Census Bureau, found that the median wealth of Hispanic households fell by 66 percent from 2005 to 2009. By contrast, the median wealth of whites fell by just 16 percent over the same period. African Americans saw their wealth drop by 53 percent. Asians also saw a big decline, with household wealth dropping 54 percent.

The declines have led to the largest wealth disparities in the 25 years that the bureau has been collecting the data, according to the report.

Median wealth of whites is now 20 times that of black households and 18 times that of Hispanic households, double the already marked disparities that had prevailed in the decades before the recent recession, the study found.

“It’s a very stark reminder of the high share of minorities who live at the economic margins of this country,” said Paul Taylor, executive vice president of the Pew Research Center and an author of the report. “These data really show their economic vulnerability.”

Household wealth, also referred to in the report as net worth, is made up of assets, like a house, a car, savings and stocks, minus debts, like mortgages, car loans and credit cards. It is tracked by the Census Bureau in the Survey of Income and Program Participation, a broad sampling of household wealth by race and ethnicity.

Nearly two-thirds of Hispanics’ median net worth in 2005 came from home equity, according to the report, and when the housing market collapsed, so did their wealth. Median home equity for Hispanics fell by 51 percent in the period of the survey. The drop was compounded by the fact that Hispanics tended to live in the places that were hit hardest in the recession, like Florida and California, the report said.

Mr. Moya lives in Prince William County, where the Hispanic population more than tripled from 2000 to 2010, according to the Migration Policy Institute, with many newcomers working in construction trades that were flourishing in the rapidly growing suburbs of Washington.

To capitalize on the influx, Mr. Moya, who is now 38 and had been working in restaurants since he came to the United States in the early 1990s, decided to start his own, and together with his brother opened Ricos Tacos Moya in 2005.

In the same year, he bought a house valued at $350,000. His monthly payments were more than $2,300, and with hungry workers filling his restaurant, he managed.

But when the collapse of the housing market swept like a wave through this Northern Virginia county, taking his house, and his bank account, and many of his customers along with it, he lost his middle-class lifestyle.

“Everything was going down,” he said.

Now he is back where he started, living with his family in a rented apartment, and working seven days a week in the taco restaurant. His house sold for $135,000 to a couple from Morocco, he said.

“My money changed,” he said. “I lost my house.”

The share of Americans with no wealth at all rose sharply during the recession. A third of Hispanics had zero or negative net worth in 2009, up from 23 percent in 2005. For blacks, the portion rose to 35 percent from 29 percent, and for whites, it rose to 15 percent from 11 percent.

About a quarter of all black and Hispanic households owned nothing but a car in 2009. Just 6 percent of whites and 8 percent of Asians were in that situation.

Whites were less affected by the crisis, largely because their wealth flowed from assets other than housing, like stocks. A third of whites owned stocks and mutual funds in 2005, compared with 8 percent of Hispanics and 9 percent of blacks.

The median value of stocks and mutual funds owned by whites dropped by 9 percent from 2005 to 2009. In comparison, the median value of holdings for those blacks who held stocks dropped by 71 percent, most likely because they had to sell when prices were low, Mr. Taylor said.

The median wealth of Hispanic and black households is at its lowest point since 1984, when the Census Bureau first conducted the study, the report said.

Mr. Moya counts himself lucky to still have his restaurant. He has to work weekends at a nightclub in Washington to keep up with his rent. His life is increasingly resembling his father’s — subsisting, without saving — but he has pinned his hopes for a better life on his sons, and he has discarded the idea of returning to Mexico.

“I want my house back,” he said. “I’m working for my house right now.”

The Pew Research analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.

As a result of these declines, the typical black household had just $5,677 in wealth (assets minus debts) in 2009; the typical Hispanic household had $6,325 in wealth; and the typical white household had $113,149.

Moreover, about a third of black (35%) and Hispanic (31%) households had zero or negative net worth in 2009, compared with 15% of white households. In 2005, the comparable shares had been 29% for blacks, 23% for Hispanics and 11% for whites.

Hispanics and blacks are the nation’s two largest minority groups, making up 16% and 12% of the U.S. population respectively.

Plummeting house values were the principal cause of the recent erosion in household wealth among all groups, with Hispanics hit hardest by the meltdown in the housing market.

From 2005 to 2009, the median level of home equity held by Hispanic homeowners declined by half—from $99,983 to $49,145—while the homeownership rate among Hispanics was also falling, from 51% to 47%. A geographic analysis suggests the reason: A disproportionate share of Hispanics live in California, Florida, Nevada and Arizona, which were in the vanguard of the housing real estate market bubble of the 1990s and early 2000s but that have since been among the states experiencing the steepest declines in housing values.

Hispanics: The net worth of Hispanic households decreased from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all groups. Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and are more likely to reside in areas where the housing meltdown was concentrated. Thus, the housing downturn had a deep impact on them. Their net worth also diminished because of a 42% rise in median levels of debt they carried in the form of unsecured liabilities (credit card debt, education loans, etc.).

Blacks: The net worth of black households fell from $12,124 in 2005 to $5,677 in 2009, a decline of 53%. Like Hispanics, black households drew a large share (59%) of their net worth from home equity in 2005. Thus, the housing downturn had a strong impact on their net worth. Blacks also took on more unsecured debt during the economic downturn, with the median level rising by 27%.

Whites: The drop in the wealth of white households was modest in comparison, falling 16% from $134,992 in 2005 to $113,149 in 2009. White households were also affected by the housing crisis. But home equity accounts for relatively less of their total net worth (44% in 2005), and that served to lessen the impact of the housing bust. Median levels of unsecured debt among whites rose by 32%.

Asians: In 2005 median Asian household wealth had been greater than the median for white households, but by 2009 Asians lost their place at the top of the wealth hierarchy. Their net worth fell from $168,103 in 2005 to $78,066 in 2009, a drop of 54%. Like Hispanics, they are geographically concentrated in places such as California that were hit hard by the housing market meltdown. The arrival of new Asian immigrants since 2004 also contributed significantly to the estimated decline in the overall wealth of this racial group. Absent the immigrants who arrived during this period, the median wealth of Asian households is estimated to have dropped 31% from 2005 to 2009. Asians account for about 5% of the U.S. population.

No Assets: About a quarter of all Hispanic (24%) and black (24%) households in 2009 had no assets other than a vehicle, compared with just 6% of white households. These percentages are little changed from 2005.

Medians and Means: Just as the gap in median household wealth among racial and ethnic groups rose from 2005 to 2009, so too did the gap in mean household wealth. However, the mean differences are not as dramatic as the median differences. (A median is the midpoint that separates the upper half from the lower half of a given group; a mean is an average, and, in this case, the average is driven upward by households with high net worth). In 2005, mean white household wealth was 2.3 times that of Hispanics and 3 times that of blacks. By 2009, it was 3.7 times that of both Hispanics and blacks.

Wealth Disparities within Racial and Ethnic Groups: During the period under study, wealth disparities increased not only between racial and ethnic groups, they also rose within each group. Even though the wealthiest 10% of households within each group suffered a loss in wealth from 2005 to 2009, their share of their group’s overall wealth rose during this period. The increase was the greatest among Hispanics, with the top 10% boosting their share of all Hispanic household wealth from 56% in 2005 to 72% in 2009. Among whites, the share of wealth owned by the top 10% rose from 46% in 2005 to 51% in 2009. These trends indicate that those in the top 10% of the wealth ladder were relatively less impacted by the economic downturn than those in the remaining 90%.

Legal migration has increased in the past five years, thanks in large part to better management of the visa process by American consulates in Mexico. But illegal migration has declined, and not primarily to stronger immigration enforcement by the United States. The major factors are smaller families, better education resources in Mexico, and better job projects in Mexico if you are educated.

These observations from a New York Times article.

Tim Pawlenty Can Get 5% Growth (but He Needs Immigrants to Help)
Posted: 22 Jun 2011 07:40 AM PDT

On April 20, 1980, Fidel Castro made an important contribution to the social sciences. His unexpected declaration that the port of Mariel would be temporarily open to any Cubans seeking to flee the island served as a natural experiment that has helped labor economists understand the impact of immigration. In his now classic paper, economist David Card [SEE ABSTRACT BELOW] convincingly showed that the massive influx of 120,000 Cubans increased the labor force of Miami by 7% yet had almost no impact on the employment or wages of natives.

This result is probably shocking to many, and certainly runs contrary to the popular but unfortunate myth that immigrants "steal our jobs". But while this study is an important result in the literature, it is not an isolated one. Most research on immigration shows small or zero impacts on unemployment and wages. This, however, does present something of a puzzle: if immigration increases labor supply, then why didn't wages fall and unemployment rise? How was it that the labor market in Miami was able to absorb so many new workers?

Immigration has little impact on wages and employment. But a 10% increase in immigration drives up house prices by 1%.

One important reason is that immigrants aren't just workers, but also consumers. Economists Bodvarsson, Lewer, and Van den Berg studied [SEE ABSTRACT BELOW] the Mariel boatlift and found that migrants increased labor demand enough to offset the increase in labor supply so that there was no negative impact on natives that one might otherwise expect when labor supply increases drastically. This result shouldn't be surprising. Immigrants buy stuff, that means businesses sell more, and they need to expand and hire new workers.

What does this have to do with Tim Pawlenty? He recently came under criticism for suggesting that he could make GDP grow 5% per year. But if immigration, even large influxes of unskilled immigration, has zero or a very small effect on wages and employment of natives, then it's actual pretty easy to make GDP grow 5% a year: just increase immigration until that happens. If we're expecting 2.5% real GDP growth a year, then increase immigration by 2.5%. If we're expecting 1.5%, then increase it by 3.5%. This shouldn't be too hard considering there are 145 million adults worldwide who would like to come here.

The bonus here is that aside from the affect on overall consumer demand, immigration has a particularly large impact on the demand for housing. Research by Albert Saiz has shown that a 10% increase in immigration drives up house prices by 1%. Whatever immigration research you're looking at, this is an order of magnitude larger than the labor market effects. This is important because immigrants tend to migrate to areas where there are already large numbers of immigrants. This means some of the worst housing markets will benefit the most from more immigration. will benefit the most. For instance, California, Nevada, Florida, and Arizona, are ranked 1st, 4th, 5th, and 9th by percent of population foreign-born. Since falling house prices are hurting the wider economy, the economic benefits of immigration would have secondary positive effects on GDP.

Is an increase in immigration what Tim Pawlenty had in mind when he promised 5% GDP growth? I doubt it. But if he was serious about his promise, he'd take a lesson from the Cuban immigrants of the Mariel boatlift and embrace one of the few ways that he could actually achieve that kind of growth.

David Card, The Impact of the Mariel Boatlift on the Miami Labor Market,
Industrial and Labor Relations Review, Vol. 43, No. 2. (Jan., 1990), pp. 245-257.

On the web at: http://www.econ.berkeley.edu/%7Ecard/papers/mariel-impact.pdf

Abstract:

Using data from the Current Population Survey, this paper describes the effect of the Mariel Boatlift of 1980 on the Miami labor market. The Mariel immigrants increased the Miami labor force by 7%, and the percentage increase in labor supply to less-skilled occupations and industries was even greater because most of the immigrants were relatively unskilled. Nevertheless, the Mariel influx appears to have had virtually no effect on the wages or unemployment rates of less-skilled workers, even among Cubans who had immigrated earlier. The author suggests that the ability of Miami's labor market to rapidly absorb the Mariel immigrants was largely owing to its adjustment to other large waves of immigrants in the two decades before the Mariel Boatlift.

Bodvarsson et al Measuring Immigration's Effects on Labor Demand: A Reexamination of the Mariel Boatlift, University of Nebraska-Lincoln and IZA
Discussion Paper No. 2919 July 2007

On the web: ftp://repec.iza.org/RePEc/Discussionpaper/dp2919.pdf

Abstract:

It is now well known that exogenous immigration shocks tend to have benign effects on native employment outcomes, thanks to various secondary adjustment processes made possible by flexible markets. One adjustment process that has received scant attention is that immigrants, as consumers of the goods they help produce, contribute to their own demand. We examine the effects of an immigration shock on labor demand by testing a general equilibrium model in which imperfectly substitutable native and immigrant workers spend their wages on a locally produced good. The shock induces three responses: (i) a substitution of immigrants for natives; (ii) out-migration; and (iii) stimulation of labor demand. According to (iii), native wages can fall, stay the same or rise, depending upon the strength of the shock and various product and factor market elasticities. As our test case, we reexamine the 1980 “Mariel Boatlift,” using Wacziarg’s “Channel Transmission” methodology. Our data set includes approximately 6,600 observations for 1979-85 from the Current Population Survey on workers in 9 different retail labor markets and Survey of Buying Power data on retail spending by consumers in Miami and four comparison cities. Our results provide a more complete explanation for why the Boatlift’s overall effects on native wages in Miami were benign: Lower wages due to greater labor supply were offset by higher wages due to greater labor demand. We conclude that the demand-augmenting effect of an immigration shock is a significant secondary adjustment process that must be considered when assessing the distributional effects of immigration.

The authors are members of the President’s Council on Jobs and Competitiveness

Their statement in full:

America needs a 21st century immigration policy

President Obama’s recent focus on immigration highlights America’s “broken” system and its impact on our economy. Fixing it requires Republicans and Democrats to show political courage and implement reforms to expand and strengthen the American economy. As members of the President’s Council on Jobs and Competitiveness, we share his deep concern that our nation’s ability to compete economically is being damaged by the two parties battling over immigration laws and policies.

To some, the link between immigration reform and economic growth may be surprising. To America’s most innovative industries, it is a link we know is fundamental.

America needs a pro-growth immigration system that works for U.S. workers and employers in today’s global economy. And we need it now.

First, we need to invest in homegrown talent that is educated and trained in the critical science, technology, engineering and math fields. The U.S. education system must be improved, top to bottom, so that our most precious resource – our children – can compete in the increasingly global world economy. Statistically our K-12 students are falling farther behind students in Korea, China and elsewhere in the physical sciences. We can and must do better.

Second, the United States must allow employers to recruit and retain the world’s best brains. We need a pro-growth based green card system to replace the current system that is plagued with years-long backlogs. Waiting a decade or more during the H1B specialty visa and green card process demoralizes the next great American immigrant Nobel laureate. More of them are returning to their home countries, like China and India, and driving new scientific breakthroughs and innovations there.

Third, we should staple a green card to every advanced diploma in critical fields to keep foreign-born students graduating from a U.S. university or college here in America, working for our future. Today foreign nationals account for 50% of master’s degrees and 70% of Ph.D. degrees in electrical and electronic engineering in the U.S. Yet, our antiquated immigration laws numerically limit the numbers of these individuals, by the thousands, from entering our country annually. What kind of strategy is it to train the world’s best and brightest in our great universities – and then require them to leave?

America’s cutting-edge job creating industries – from computing to biotech – rely on immigrant scientists, engineers and entrepreneurs to remain competitive. And as the President said in his speech, they are responsible for founding iconic companies like Google, Yahoo and eBay.

According to a Kauffman Foundation study, 40 million jobs have been created in the past 25 years by high growth U.S. entrepreneurial companies. Of those, according to a Duke and UC Berkeley report, more than a quarter of U.S. technology and engineering businesses launched between 1995 and 2005 had a foreign-born founder. And in 2005, companies created by immigrants produced $52 billion in sales and employed 450,000 workers, so getting this right is paramount.

Silicon Valley offers a good example of the impact foreign nationals make on U.S. innovation – and the arduous process companies must go through to retain them. With 80% of Intel R&D conducted in the U.S., employing people with specific expertise in U.S. facilities is imperative. Right now, there are software engineers in the UK, who cannot come to work in a U.S. Intel facility until visas are available in the next fiscal year. And experts in next-generation mobile technology who must remain in Finland, rather than joining an Intel research and development team in the U.S.

At Facebook, Javier Olivan was instrumental in creating the technology that has translated the site into more than 70 languages, connecting people and businesses in the U.S. with markets around the world. Despite making a significant contribution to economic growth, Javier was lucky to be able to stay in this country. The year he applied for an H-1B visa, there were 150,000 applicants and only 65,000 visas.

U.S. employers must look ahead to coming talent shortages and plan their workforce needs years in advance. They need policy certainty from Washington to know they will be able to hire the very best talent to meet the demands of the global innovation marketplace. It is time for Congress and the Administration to pass bi-partisan immigration reforms. In particular, taking quick action to attract and retain science and engineering talent is critical to the growth of our economy.

Let’s create a pro-growth immigration system that works. Our global competitiveness should not be a partisan debate, it should be a top American priority.

The writers, Steve Case, CEO of Revolution, John Doerr, Partner, Kleiner Perkins Caufield & Byers ; Paul Otellini, CEO of Intel Corporation, and Sheryl Sandberg, COO of Facebook, are members of the President’s Council on Jobs and Competitiveness.

The article in full:

A Crackdown on Employing Illegal Workers
By JULIA PRESTON

TUCSON — Obama administration officials are sharpening their crackdown on the hiring of illegal immigrants by focusing increasingly tough criminal charges on employers while moving away from criminal arrests of the workers themselves.

After months of criticism from Republicans who said President Obama was relaxing immigration enforcement in workplaces, the scope of the administration’s strategy has become clear as long-running investigations of employers have culminated in indictments, convictions, exponentially increased fines and jail sentences. While conducting fewer headline-making factory raids, the immigration authorities have greatly expanded the number of businesses facing scrutiny and the cases where employers face severe sanctions.

In a break with Bush-era policies, the number of criminal cases against unauthorized immigrant workers has dropped sharply over the last two years.

Among the employers who have felt the impact of the administration’s tactics are two owners of Mexican restaurants in the Chuy’s Mesquite Broiler chain, which are popular for their laid-back Margaritaville mood and their broiled mahi tacos. On April 20, immigration agents descended on 14 Chuy’s restaurants in coordinated raids in Arizona and California, detaining kitchen workers and carrying away boxes of payroll books and other evidence.

But at the arraignment days later in federal court here, no immigrant workers stood before the judge. The only criminal defendants were the owners, Mark Evenson and his son Christopher, and an accountant who worked with them, Diane Ingrid Strehlow. If the Evensons are convicted on all charges against them of tax fraud and harboring illegal workers, they each could face more than 80 years in jail.

Of 42 illegal immigrants caught in the Chuy’s sweep, only one was charged with a crime, and it was not related to the raid. Thirteen workers were processed for immigration violations — which are civil offenses — and detained or deported. The others remained in this country as witnesses or to seek legal status through the immigration courts.

Under President George W. Bush, immigration agents frequently conducted high-profile factory raids, leading away scores of unauthorized workers in handcuffs, often to face jail time for document fraud or identity theft before being deported. After a raid in Postville, Iowa, in 2008, nearly 300 immigrant workers went to federal prison.

The Chuy’s prosecution contrasted with the application by state and county authorities of a law that Arizona adopted in 2007 to punish employers who hire illegal immigrants; the measure was upheld by the Supreme Court on Thursday. Despite the political furor over that law, only a handful of cases have been brought against employers under its terms, which provide mainly for civil penalties. But state authorities have continued to bring criminal cases against illegal immigrant workers, leading to their deportations.

The Obama administration’s record on workplace enforcement has been fiercely debated in Washington since President Obama announced that he would try, against steep odds, to pass an immigration overhaul this year. Administration officials say that their audits and investigations of employers have laid the groundwork for a system that would dissuade companies from hiring illegal immigrants.

“We have steadily increased our efforts to investigate and prosecute employers who violate the law on a serious and grand scale,” said John Morton, the director of Immigration and Customs Enforcement, also known as ICE. The next step, administration officials said, is to open a pathway that would allow millions of illegal immigrants in the country to live and work here legally.

Republicans, pointing to the decline in arrests of unauthorized workers, say the administration is failing to remove those immigrants from the work force just when Americans are grappling with high rates of unemployment.

“While President Bush’s so-called get-tough strategy clearly did not do enough to remove illegal workers, President Obama’s strategy is much worse,” said Representative Elton Gallegly, Republican of California, who is chairman of the House Judiciary Committee’s immigration subcommittee.

Secretary Janet Napolitano of the Homeland Security Department halted the flashier raids in 2009. Until this year, ICE’s leading tactic was “silent raids,” audits of companies’ hiring documents. If immigration inspectors found irregularities suggesting that immigrant workers’ identity documents might be false, managers had to dismiss the workers or risk prosecution.

Last year, according to government figures, the enforcement agency started 2,746 workplace investigations in addition to the audits, more than double the number in 2008, the last full year of the Bush administration. Fines totaling about $43 million, also a record, were levied on companies in immigration cases.

Department of Homeland Security officials, speaking anonymously in order to discuss internal policy, said immigration officers were no longer authorized to carry out workplace raids unless they cooperated with federal prosecutors to prepare criminal cases against the employers. Last year, 119 employers were convicted.

In March, Rick M. Vartanian, the president of a furniture company in California, was sentenced to 10 months in prison for hiring illegal immigrants. A federal investigation is also under way into hiring practices at the Chipotle chain of Mexican fast-food restaurants.

Dennis K. Burke, the United States attorney for Arizona, who led the Chuy’s prosecutions, called them a “game changer” for the state. During a lengthy inquiry, investigators, including undercover operatives, discovered that the Evensons were keeping two sets of books: one for waiters and cashiers, Mr. Burke said, and another for Mexican kitchen workers.

According to the indictment, a customer complained to Mark Evenson that he was employing illegal immigrants. “I need to hide you in the kitchen,” Mr. Evenson is said to have told one Hispanic employee he knew to be undocumented.

Mr. Burke said prosecutors saw that they could accuse the Evensons under the severe penalties of the tax code — “the hammer,” as he put it. Charged with evading more than $400,000 in taxes on wages for some 360 unauthorized immigrant workers, the Evensons together face more than $10 million in fines if convicted on all counts. They have pleaded not guilty, and their lawyers declined to comment, saying they awaited evidence from prosecutors.

Unusually, even immigration lawyers who represented Chuy’s workers spoke favorably of the federal handling of the case.

“ICE was nice,” said Delia Salvatierra, a lawyer in Phoenix who represents two workers who were in the process of gaining legal status when they were detained. “It was as benign as it can get,” she said. Officers released the two workers so they could pursue their cases in immigration court.

The two of them, who are brothers, said they came to the United States from Mexico in the 1990s. Both had worked most of the time since in Chuy’s restaurants. The eldest, Alejandro Díaz Ojeda, 36, learned to cook the Chuy’s menu. Then he taught his brother, Javier, who is 30.

The brothers said they had been treated well. “I became very fond of the company,” Javier said.

Their experience, however, suggests how the Evensons kept their menu prices famously low. The brothers said they were paid an hourly wage — Javier made $9.50 after 14 years — by payroll check for the first 40 hours a week. Any overtime was paid with a different check, with no taxes deducted and no higher rate, they said. Both brothers said they often worked 70 hours a week.

The severe charges against the Evensons registered broadly with Arizona executives, business leaders here in Tucson said. But they said the case was mainly a cautionary lesson for managers who knowingly hire unauthorized immigrants.

“If companies are paying workers under the table,” said Glenn Hamer, president of the Arizona Chamber of Commerce and Industry, “we encourage the federal government to throw the book at them.”

The case is Chamber of Commerce of America vs. Whiting et al. Here is the key passage from the decision:

The [Federal] Immigration Reform and Control Act (IRCA) makes it “unlawful for a person or other entity . . . to hire, or to recruit or refer for a fee, for employment in the United States an alien knowing the alien is an unauthorized alien.” 8 U. S. C. §1324a(a)(1)(A). Employers that vio- late that prohibition may be subjected to federal civil and criminal sanctions. IRCA also restricts the ability of States to combat employment of unauthorized workers; the Act expressly preempts “any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.” §1324a(h)(2).

IRCA also requires employers to take steps to verify an employee’s eligibility for employment. In an attempt to improve that verification process in the Illegal Immigration Reform and Immigrant Responsi- bility Act (IIRIRA), Congress created E-Verify—an internet-based system employers can use to check the work authorization status of employees.

Against this stautory background, everal States have recently enacted laws attempting to impose sanctions for the employment of unauthorized aliens through, among other things, “licensing and similar laws.” Arizona is one of them. The Legal Arizona Workers Act provides that the licenses of state employers that knowingly or intentionally employ unauthorized aliens may be, and in certain circumstances must be, suspended or revoked. That law also requires that all Arizona employers use E-Verify.

The Chamber of Commerce of the United States and various business and civil rights organizations (collectively Chamber) filed this federal preenforcement suit against those charged with administering the Arizona law, arguing that the state law’s license suspension and revocation provisions were both expressly and impliedly pre- empted by federal immigration law, and that the mandatory use of E- Verify was impliedly preempted. The District Court found that the plain language of IRCA’s preemption clause did not invalidate the Arizona law because the law did no more than impose licensing conditions on businesses operating within the State. Nor was the state law preempted with respect to E-Verify, the court concluded, because although Congress had made the program voluntary at the national level, it had expressed no intent to prevent States from mandating participation. The Ninth Circuit affirmed.

Held: The judgment is affirmed.

Justice Breyer’s minority opinion says, “Arizona calls its state statute a “licensing law,” and the statute uses the word “licensing.” But the statute strays beyond the bounds of the federal licensing exception, for it defines “license” to include articles of incorporation and partnership certificates, indeed virtually every state-law authorization for any firm, corporation, or partnership to do business in the State. (excepting professional licenses, and water and environ- mental permits). Congress did not intend its “licensing” language to create so broad an exemption, for doing so would permit States to eviscerate the federal Act’s pre- emption provision, indeed to subvert the Act itself, by undermining Congress’ efforts (1) to protect lawful work- ers from national-origin-based discrimination and (2) to protect lawful employers against erroneous prosecution or punishment.”

According to the New York Times, “The decision on Thursday turned mostly on the meaning of a provision of a 1986 federal law, the Immigration Reform and Control Act, which said that it overrode “any state or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who” recruit or hire “unauthorized aliens.”

The question was whether Arizona was entitled to supplement the penalties in the 1986 federal law with much tougher ones of its own. The state argued that the phrase in parentheses — “other than through licensing and similar laws” — allowed it to suspend or revoke the business licenses of repeat offenders. Critics called that provision of the state law a “business death penalty.”

The NY Times article in full:

Justices Uphold Law Penalizing Hiring of Illegal Immigrants
By ADAM LIPTAK
Published: May 26, 2011

WASHINGTON — The Supreme Court on Thursday upheld an Arizona law that imposes harsh penalties on businesses that hire illegal immigrants.

The 5-to-3 decision appeared to endorse vigorous state efforts to punish employers who intentionally hire illegal workers. The majority opinion, written by Chief Justice John G. Roberts on behalf of the court’s five more conservative members, said that Colorado, Mississippi, Missouri, Pennsylvania, South Carolina, Tennessee, Virginia and West Virginia had recently enacted laws similar to the one at issue in the case.

The decision did not directly address a more recent Arizona law that gives the police greater authority to check the immigration status of people they stop.

The United States Court of Appeals for the Ninth Circuit blocked enforcement of that law in April, and the case may reach the Supreme Court soon.

The challenge to the Arizona law that was the subject of Thursday’s decision was brought by a coalition of business and civil liberties groups, with support from the Obama administration.

They said the law in question, the Legal Arizona Workers Act, conflicted with federal immigration policy.

The act was signed into law in 2007 by Janet Napolitano, a Democrat who was then the state’s governor. Ms. Napolitano is now secretary of the Department of Homeland Security.

The decision on Thursday turned mostly on the meaning of a provision of a 1986 federal law, the Immigration Reform and Control Act, which said that it overrode “any state or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who” recruit or hire “unauthorized aliens.”

The question was whether Arizona was entitled to supplement the penalties in the 1986 federal law with much tougher ones of its own. The state argued that the phrase in parentheses — “other than through licensing and similar laws” — allowed it to suspend or revoke the business licenses of repeat offenders. Critics called that provision of the state law a “business death penalty.”

Chief Justice Roberts wrote that the word “licensing” should be read broadly to allow states to supplement federal efforts to prevent the hiring of illegal workers. His decision was joined by Justices Antonin Scalia, Anthony M. Kennedy, Samuel A. Alito Jr. and, for the most part, Clarence Thomas.

Peter J. Spiro, who teaches immigration law at Temple University, said the majority’s broad reading would be consequential. “In some ways, this becomes an exception through which states can drive a truck,” he said. “It’s definitely going to embolden anti-immigration constituencies to work through state capitals.”

There is reason to think that those constituencies will meet with some success, judging from the fact that 13 states filed a brief supporting Arizona.

But Robin S. Conrad, a lawyer with the U.S. Chamber of Commerce’s litigation unit, said in a statement that “the decision does not give states or local governments a blank check to pass any and every immigration law” and that only state laws consistent with the federal one were permissible. The Chamber of Commerce was a plaintiff in the suit.

Ms. Conrad added that “businesses from Main Street to Wall Street are overwhelmed by a cacophony of conflicting state and local immigration legislation” and that Congress should bring order to the area.

Cecillia D. Wang, a lawyer with the American Civil Liberties Union’s Immigrants’ Rights Project, also urged a cautious reading of the decision, saying that it was narrowly tied to the Arizona law. The A.C.L.U. was part of the odd-bedfellows coalition that had challenged the law.

Jay Sekulow, a lawyer with the American Center for Law and Justice, a conservative public interest law firm that filed a brief urging the court to uphold the law, said the ruling was “a victory for Arizona and other states” that “provides a realistic roadmap” for enacting legislation that does not run afoul of the federal law.

Justice Stephen G. Breyer, in a dissent joined by Justice Ruth Bader Ginsburg, said the word “licensing” in the federal law should be read narrowly to mean “employment-related licensing systems” and not all licenses. “Why not an auto licensing law?” he asked of the majority’s interpretation. “Why not a dog licensing law?”

Chief Justice Roberts responded that Congress could easily have limited the phrase had it wanted to. “If we are asking questions,” he added, “a more telling one may be why, if Congress had intended such limited exceptions to its prohibition on state sanctions, it did not simply say so, instead of excepting ‘licensing and similar laws’ generally?”

Chief Justice Roberts wrote that the Arizona law was a measured response to real problems and that “licensing sanctions are imposed only when an employer’s conduct fully justifies them.”

He added that there was no reason to fear that the state law would lead to discrimination against Hispanics who were in the United States lawfully.

“The most rational path for employers,” the chief justice wrote, “is to obey the law — both the law barring the employment of unauthorized aliens and the law prohibiting discrimination — and there is no reason to suppose that Arizona employers will choose not to do so.”

But Justice Breyer said the state law disrupted a carefully calculated balance between competing Congressional goals and that it “seriously threatens the federal act’s antidiscrimination objectives.” The state law increased penalties for hiring illegal workers, he said, but it left “the other side of the punishment balance — the antidiscrimination side — unchanged.”

The decision, Chamber of Commerce v. Whiting, No. 09-115, also upheld a second aspect of the Arizona law, this one making mandatory an otherwise voluntary federal program, E-Verify, that allows employers to validate whether potential employees are authorized to work.

In his dissent, Justice Breyer said it was a mistake to require use of a “pilot program” that was “prone to error.”

Justice Sonia Sotomayor wrote a separate dissent. Justice Elena Kagan recused herself from the case because she had worked on it as United States solicitor general.

“I cannot believe,” she wrote, “that Congress intended for the 50 states and countless localities to implement their own distinct enforcement and adjudication procedures for deciding whether employers have employed unauthorized aliens.”